The report suggests the threat is now so significant that a white paper should be developed by the incoming government within its first year of office.

"We suggested that a 12-month timescale is given after the general election just to add a little bit of urgency to governments' thinking in this regard," said Dr Feakin, one of the report's authors.

He said the current policies were disjointed and distributed among a number of different departments.

"What we don't have... is a clear idea of what is the landscape in the cyber domain and that isn't clear enough for, be they government workers, for the public, for businesses as well, so they can understand what that picture is," he said.

He added it was not only government information that had to be defended against cyber attacks.

"We might receive an email with some kind of linkage to a website which is encouraging you to input banking details, personal profile details, in order that they can be exploited for criminal purposes," he said.

Hackers could potentially cause widespread destruction

Darren Pauli, editor of SC Magazine, which reports on information security, also believes there is a clear and present danger that certain digital systems could be hacked.

"They're worried about what damage the people, the actual engineers that are working on these systems, could do, should they... for any reason should they want to inflict harm," he said.

"There is certainly a need to keep abreast of this and maybe a white paper could be something that could help."

Mr Pauli says some systems are more vulnerable than others, but both government and business are at risk of widespread destruction.

"The potential is that there's certain systems that if they were attacked and things were to align, that they could cause great physical harm," he said.

"Think of in the utility sector... they talk of opening up dam gates and stuff like that, and shutting off energy, power.

"There is a potential for (widespread destruction)."

Dr Feakin says one way Australia could enhance its digital defence is by working more closely with geopolitical allies.

"The US has been making a lot of strides in terms of having bilateral dialogues with China or Japan and various other partners across this region," he said.

He says Australia can learn from what the US has done, but also learning from its mistakes.

"As well as understanding and working closer with our traditional allies in the US, we also as a country need to develop a regional engagement plan of how we're going to engage countries across this region," he added.